Tuesday, October 24, 2017

Private oil players to get Mexico gigs by summer

November 11, 2010 by  
Filed under Oil News

Energi ;  Mexico will award private companies its first contracts to redevelop mature oilfields by next summer, a senior Mexican oil official said today.

Sergio Guaso, the head of new business models for state oil monopoly Pemex’s oil and gas production arm, said the company was close to approving the first round of contracts that would bring private companies back into Mexico’s oil patch for the first time since the sector was nationalised in the 1930s.

“We’re in the final stage of approvals,” Guaso said at the Platts Mexican Energy conference. “The first contracts can be expected by the summer of next year.”

Pemex has been hoping private companies will help it modernise production and boost crude output in older fields by up to 150,000 barrels per day, Reuters reported.

But the state-run company has missed several self-imposed deadlines to unveil new contracts to be auctioned to companies and has scaled back its ambitions for an initial round of bidding.

Carlos Morales, the head of Pemex’s oil and gas production unit, told Reuters last month the company would only offer three onshore areas in the first auction of operating contracts.

A slide in Guaso’s presentation showed a nine-month timetable for the award of the first contracts stretching from the approval of the scheme by Pemex’s board of directors, making it unlikely the first contracts will be awarded until the third quarter of 2011 at the earliest.

Legislation passed in late 2008 loosened the legal regime governing Pemex’s relationship with contractors, allowing it to offer new types of contracts with cash incentives based on performance.

However Pemex has been slow to release the new contracts amid shifts in its strategy away from deep-water oil exploration as well as an as yet unresolved challenge of the constitutionality of the scheme before Mexico’s Supreme Court.

Pemex hopes to bring in foreign players to work on a fee-per-barrel basis to reactivate aging oilfields and boost its exploration efforts in the deep waters of the Gulf of Mexico.

Private oil companies are anxious to get into Mexico amid limited opportunities elsewhere as many of the most promising areas in the world for oil exploration are off-limits to private companies.

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